Between your mailbox, TV ads, and the Internet, it may seem impossible to ignore Medicare Annual Enrollment. Yet every year, millions of Medicare beneficiaries do just that. And, since they obviously live to tell the tale, you may wonder: What’s the big deal? Do I really have to do anything?
Of course not. Life is all about choices. You can choose to sit out the Annual Enrollment Period (AEP). But, there are consequences to every choice you make. In this post, we discuss what happens when you ignore AEP, and why we recommend you don’t.
If you already have Medicare coverage, you may ask why they push the Annual Enrollment Period so hard every year. There seems to be no end to the commercials, mailings, and even blog posts like this.
The reason is simple: Change.
Like everything in life, Medicare is always changing. Costs go up (and sometimes down). Doctors leave and enter networks. Drugs enter and leave formularies. Carriers drop and add plans. Some types of plans go away entirely. AEP is your chance to respond to those changes to ensure you still have the best coverage available at a price you can afford.
As of this writing (November 6, 2019), Medicare has yet to release prices for 2020. However, we do have cost projections.
Original Medicare costs are expected to rise slightly in 2020.
In addition, the high-income bracket is seeing its first adjustment for inflation. If your annual income exceeds $87,000 (individual) or $174,000 (married), you may have higher premiums and/or deductibles.
All MA plans have to offer at least the same benefits you get with Parts A and B, but most offer additional coverage. And thanks to expanding benefits, Medicare Advantage (MA) plan enrollment keeps climbing. Prescription drug coverage is the most common additional service. Other common options include vision, dental, and hearing.
Thanks to new regulations from the Center for Medicare and Medicaid Services (CMS), those additional benefits are expanding significantly. MA plans can now tailor their offerings – and their prices – to enrollees who meet certain health conditions. Some of these benefits include:
Many beneficiaries need these types of services during recovery from a surgery or injury. Unfortunately, Medicare either does not cover this type of care or only covers it for a short period or under very specific circumstances.
There are two major changes coming to Part D in 2020.
The donut hole is officially closed. Now, beneficiaries pay only 25 percent of all drug costs – both generic and name brand – once they reach the coverage gap. You reach the coverage gap when you and your plan spend $4,020 (the projected amount for 2020). You leave the coverage gap and enter what’s known as catastrophic coverage once your out-of-pocket spending reaches a certain amount. From there, you have only a small co-pay for covered prescriptions.
The out-of-pocket spending threshold to leave the coverage gap is significantly higher in 2020. From $5,100 in 2019, it’s projected to be $6,350 in 2020. For comparison, it only went up $100 between 2018 and 2019 (and most other years).
The main benefit to taking action during AEP is saving money. You’d be amazed by how much money you can save by doing a bit of comparison shopping.
For example, the co-payment on one of my prescriptions at a preferred pharmacy is nearly $80. I can get that exact same prescription, without even using my insurance, for only $18 at another pharmacy less than a mile away. The reason for the discrepancy is that my current plan places my prescription in one of the higher tiers.
Of course, most savings aren’t that dramatic. But you can bet I’m using AEP this year to find the plan that has my prescription on one of the lower tiers.
If you want to lower your healthcare costs, you can’t afford to ignore Medicare Annual Enrollment.
AEP lasts from October 15 through December 7. That gives you eight weeks to compare your options to find the best plan that fits both your needs and budget.
Start by making a list of what’s important to you. This step is vital, since it helps you focus on what you actually need. Some plans have so many additional benefits, it can distract you from the fact that it doesn’t provide what you actually need.
You also need a list of your providers and prescription drugs. No matter how great a plan is, if it doesn’t cover your doctor or prescriptions, it’s probably not the right one for you.
Once you have your lists together, pull out the Annual Notice of Change and Evidence of Coverage documents your plan sent in September. Compare this to your list to see what changes are in store and how they’ll affect you next year.
To understand all the changes coming, you should also review the Medicare & You handbook from CMS.
Finally, you can begin comparing plan options in your area with our plan finder tool. Just enter your zip code and county, select the January 1 start date, and hit Continue.
Chris Gasparini has been a licensed insurance agent since 2005. He enjoys helping Medicare beneficiaries navigate their options to find the best solution for their unique needs. Chris feels as though his work truly helps people. Because he represents multiple insurance companies and plan types, Chris is able to help Medicare beneficiaries find the best, most cost-effective plan. Every day, he leaves work knowing he did what was right for each and every client he serves.
The MedicareUSA website is operated by HealthPlanOne, LLC a licensed health insurance agency based in Connecticut; in California d/b/a HPOne Insurance Agency, license #OF30784. HealthPlanOne, is a licensed and certified representative of Medicare Advantage HMO, PPO and PPFS organizations and stand-alone prescription drug plans with a Medicare contract. Enrollment in any plan depends on contract renewal.
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Other Pharmacies are available in the plans' networks.
Last Updated 12/21/2018